The transition period does not simply delay the negative consequences of Brexit – it amplifies them

So it was with this yesterday from European Council President Donald Tusk:

I have just recommended to EU27 leaders that we welcome, in principle, the agreement on transition. In practice, the transition phase will allow to delay all the negative consequences of #Brexit by another 21 months.

Brexit transition will “delay all the negative consequences of Brexit by another 21 months”.

What can we make of this?

First, deferring the negative consequences, not alleviating them, is the name of the game for the EU side just now.

Second, the EU is by now just about as intent on getting the UK out of the EU by 29th March 2019 as May and the UK government are (as Seb Dance rightly points out), and the EU too is content to leave the really complicated Brexit issues for the transition period.

Third, that Tusk does not really acknowledge that time itself might make some of the Brexit problems harder to solve than they are now.

The appeal of pushing problems forward like this is clear – it avoids pain now, leaving someone else to take the hit later. And there is always the ill-guided hope that some masterful solution for the problems might emerge in the meantime. Tusk is especially free to play this game as he is not even going to be in office past the autumn of 2019 and hence will not have to face the consequences.

But what does this do to the major outstanding Brexit issues?

Take the Irish Border question. As Patrick Smyth rightly argues in the Irish Times, progress this week towards agreeing a transition period for the UK essentially just holds the line here – the UK has acknowledged that a backstop option has to be included (that Northern Ireland would stay in the Single Market and Customs Union) but states such an option is undesirable, but the UK also has no other workable proposal.

What’s the likely outcome? The UK will agree to the backstop now, but will avoid having to confront the border issue, and so the issue will rear up again in 2020 when the end-of-transition clock is ticking. By which time the UK is actually out of the EU.

Were the UK to decide – in 2020 rather than now – that, actually, a border in Ireland is a price too high for a Hard Brexit (out of the Customs Union and out of the Single Market), and wanted to contemplate a softer Brexit or indeed no Brexit at all, it is by then much harder. If the UK does legally leave on 29 March 2019 then the route back into the EU is following the rules of accession, a process I cannot foresee the UK undertaking (Schengen, Euro anyone?)

To put it bluntly, being in the EU and deciding to move to a Soft Brexit (or not leave) by March 2019 is much smoother than aiming for a transition period to a Hard Brexit, realising it does not work in 2020, and then backing out to a Soft Brexit or trying to stay in altogether only then.

Another major Brexit headache is the UK’s trade relations with the rest of the world post-Brexit, and the impact of the UK being a non-EU Member State has on that. I have explored this issue in detail here, and Nicolai von Ondarza has more on it in a thread here today. At the moment – without any proper assessment of whether this will work – the UK is banking on the rest of the world just treating the UK as if it were still an EU Member State during the transition phase while the UK works out how and if it can replicate the EU’s 759 international agreements. But once the UK is not an EU country, there is an impact on rules of origin in the EU’s trade deals, and firms will have to adjust their supply chains accordingly – even before transition starts.

So here too, delaying decisions comes with a price. The UK might eventually be able to sort a FTA with the EU that can smooth those supply chain headaches, but in the meantime the rest of the world will pick off what it can while the UK is not a Member State of the EU and its future relationship with the EU is unknown.

Of course there is another way to buy time without this pain – extend Article 50. But both the UK and the EU are not contemplating that at the moment.

As if that little lot were not enough, there are four further headaches of the way all of this is currently going, none of them insignificant.

First, December 2020 is just 17 months ahead of a UK General Election. If getting UK politicians to agree anything at all with regard to Brexit is hard now, how hard is it going to get when their eyes are on an election?

Second, the Withdrawal Agreement, as currently drafted, does not have a provision in it to extend the Transition Period. At least Article 50 has such a mechanism – the unanimous agreement of the rest of the EU. This is the EU putting a gun to the UK’s head, knowing that May’s government does not have the political capital now to argue that this is absurd and an extension clause must be included. This is the UK and the EU engaged in a sort of death pact, with the rest of us caught up with the consequences.

Third, the transition period is a democratic scandal as it means the UK has all the political obligations of EU membership, but its citizens have no political representation in the EU institutions. Coupled with my second point above, and lacking any confidence that 21 months is enough to solve the outstanding issues, UK citizens are facing democratic disenfranchisement on a major scale here. Extending Article 50 instead also solves that issue.

Fourth, there is the human cost of Brexit – stories like this today from Alexander (@37paday). While Brits in the EU, and EU citizens in the UK, have been doing their best to plan their lives, the human cost is not insignificant. Making all of those people wait, with some possible forlorn but undefined hope of a better solution, but no certainty, is no fun for anyone concerned. Those people will begin to start acting on the basis of the information they have, however incomplete.

So what is to be done?

Demand real, practical answers to all the issues I raise here. Demand them forcefully and relentlessly, especially in the areas where so horribly little is known – how the Irish Border issue could actually be solved, and what will happen to the UK’s trade relations with the rest of the world (the UK cannot just hope the rest of the world will play nicely). Repeatedly point out there is another way to do all of this – to extend Article 50 – rather than commit to this damaging transition.

But I fear that is not going to be enough. All that is going to save the UK from this mess now is for there to be a major political crisis of some sort, and for the government to change. Defections from the Tory Party for a start. And let’s have that crisis sooner than later, because if that happens after the UK has already left there is little hope to rescue anything positive from this situation.

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7 Comments

with regards to your comment on the ongoing uncertainty for EU and UK citizens, i’ll certainly acknowledge the fact that people are indeed now making plans. my employer here in london is a european cross-border service provider who requires a significant foreign languages provision, a requirement which UK citizens are generally unable to fulfill and as such my employer is heavily reliant on multi-lingual EU citizens to service its international clients. i can anecdotally confirm that german speakers of any quality are now extremely difficult to find and it’s also struggle to retain those we have working for us, as the germans, austrians and swiss have little hesitation to return home where jobs are more plentiful with better pay and a lower cost of living. equally, better-quality french speakers are also now becoming less plentiful, while spanish and italian speakers are still to be found in decent numbers. my employer’s original plan to open a single-site office in germany in order to continue looking after our german, austrian and swiss clients has ow morphed into a far larger project to look at a multi-purpose site in the germany/belgium/holland border triangle from where to service a greater continental geographic area, as multi-lingual staff in this region are plentiful and the passport-free schengen and single-currency euro factors afford for better practicalities. most of our UK-based competitors are in a similar situation and corporate planning now appears to be diverging from any government pronouncements, as the “transition” period is rightly regarded as no more than a soft extension of A50 in order to allow everyone to get ready for the inevitable hard impact of brexit (except the UK government, naturally). if my employer’s senior management, nice guys all but quite the sleepy mob, are now facing up to the reality of what’s up ahead, then i’d be stumped sideways if similar forward planning wasn’t taking place to a high degree pretty much everywhere else.

The irony is two fold:e 50 was not debated in Parliament as it should have been ~ it was just rushed through by both main parties, who are both pro Brexit in their main thrust. Lord Kerr, who drew up Article 50 has said it is irrevocable at any moment (I’ve him speak on this). Sadly, as many remark, we have outstayed our welcome and our manky awful politicians are actively making sure that we would not be welcomed back. The other ‘fold’ is the revelation that Leave.EU, the alt right campaign site funded by billionaire Arron Banks (and possibly some Russians?) used Cambridge Analytical data in their campaign, and also targetted with utter lies (they call them Facts) those whose minds were open to xenophobia (see Guardian front page 24/3/2018). In the light of these two emerging issues, any ‘democratic’ government MIGHT want to call a halt until all has been satisfactorily resolved. Sadly, neither main party will. Too much status, money and fear of losing power. I was disgusted with Cameron for calling the (advisory) merely to conserve his own power. My disgust grows incrementally with each fresh revelation.

” Plus given that the French, Dutch and Irish are ahead of the UK in planning for customs staff etc, it wouldn’t surprise me if the EU-27 believed that they could be generally ready in 2020 for renewed customs procedures between the EU-27 and the UK, even if the UK is not.”

UK govt understands nothing. They would not know planning if you hit them over the head with a cricket (or baseball) bat. They still think the EU will fold and give them everything they have wanted from the beginning. I kid you not.

Interesting post, but I’m going to play devil’s advocate here and suggest that you need to look at these issues from a different perspective. To start with, yes, the UK should have remained in the EU. It’s common sense. The least disruptive outcome. And EU membership was nothing as bad as the Brexiteers made it out to be. It was in fact beneficial.

However, from the EU perspective now, it is quite logical for them to focus on getting the UK out by March 29, 2019. Not only to keep the new European Parliament elections nice and tidy, but because the EU-27 probably don’t really want the UK to remain any longer. Sure they profess that the option is always open to the UK, but honestly, why on earth would they really want that? Given the drama the UK has put the EU through from 2015 between the renegotiation, the referendum and Brexit, the EU-27 are most likely looking forward to March 30, 2019 when peace and quiet return and they no longer have to deal with a UK government acting like a delusional, spoiled brat. It’s like taking a financial hit in order to end a dysfunctional relationship – sure it hurts the pocket, and ending the relationship brings heartache (and in this case there is massive disruption to people’s lives), BUT in the longer run you are better off for it (well the EU-27 would be better off for it, not the UK).

That’s why the EU is getting into the withdrawal agreement all the things it considers essential and will let the UK figure out the rest on its own. By December 31, 2020 there should be a backstop for Northern Ireland and a working framework for EU-27 citizens in the UK and UK citizens in the EU-27 to keep certain rights. Plus given that the French, Dutch and Irish are ahead of the UK in planning for customs staff etc, it wouldn’t surprise me if the EU-27 believed that they could be generally ready in 2020 for renewed customs procedures between the EU-27 and the UK, even if the UK is not.

Excellent, Jon, once again. Spot on. With a colleague we have been blogging for an extension of the Article 50 period for some time, working in particular on EU27 politicians arguing that extension is in their interests too. There is a bit of momentum now in the UK at the level of bloggers but also peers and MPs. We have contacted many of them. Interesting that the Commons’ Brexit Committee has come out for an extension.
We must continue to press this as the Brexit options are shown to be so ridiculous. Time is getting short, but me must keep arguing for sanity.

I commend your efforts John Speed, but how are you guys going to convince the EU27 politicians than an extension is in their interests too? An extension is only in the EU27 interests insofar as it provides for no disruption by April 2019, but:

1. A transition agreement also provides for that (with the bonus that the UK is out of the EU and no longer capable of being a disruptive member). What can an extension achieve that a transition agreement cannot?

2. The extension option runs the risk of a never-ending Brexit negotiation, since the temptation will be there to do further extensions.

3. How long would an extension need to be for? If an indefinite extension is granted it hands a great deal of negotiating leverage back to the UK (which is most certainly NOT in the EU27’s interests)

4. An extension means UK participation in the European Parliament elections which will further complicate the negotiations as the negotiations will now have to include some transition arrangement concerning elected British MEPs in 2019(I wouldn’t discount an unspoken desire by EU27 politicians to see Farage and his merry band finally out of their hair in 2019).

5. A lot of the intractable issues are down to UK intransigence to face up to facts. If the entire period of 2015 to 2018 wasn’t long enough for the UK government and political class to get clued up, why would an extension of a couple of years followed by a transition of 2 or more years really make a difference? As things stand it seems like some kind of hard brexit is inevitable due to the UK’s positions (which haven’t really changed, they’ve only accepted what the EU wants out of the withdrawal agreement, not for the future relationship post-withdrawal – the UK is still intent on leaving the single market and customs union after all), so why keep putting off the pain? If it has to happen, why not just have it happen and be done with it so work can be done towards picking up the pieces on the EU27 side?

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